National Consumer Disputes Redressal
National Insurance Co. Ltd. vs M/S. Ruchira Papers Limited, on 6 May, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3258 OF 2012 (From the order dated 23.05.2012 in First Appeal No. 211/2000 of the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla) National Insurance Co. Ltd., Yamunanagar Branch, District Yamunanagar Haryana through Manager, Regional Office I, Jeevan Bharati Building, 124, Connaught Circus, New Delhi 110 001 ... Petitioner (s) Versus M/s. Ruchira Papers Limited, Trilokpur Road, Kala Amb., District Sirmour, H.P. through Shri Sushil Kumar Sharma . Respondent(s) BEFORE HONBLE DR. B.C. GUPTA, PRESIDING MEMBER Appeared on 18.04.2013 at the time of arguments, For the Petitioner(s) Mr. Kishore Rawat, Advocate For the Respondent (s) Mr. D.K. Mehta, Advocate PRONOUNCED ON : 6th MAY, 2013 O R D E R
This revision petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 against the order dated 23.05.2012 passed by the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla (hereinafter referred to as State Commission) by which appeal filed by the present petitioner / opposite party against the order dated 14.05.2009 passed by the District Forum, Sirmour in complaint case No. 21/2005 presented on 18.03.2005 was partly allowed and the order of the District Forum was modified to the extent that instead of Rs. 10,61,210/-, a sum of Rs. 5,71,172/- was ordered to be paid by the petitioner to the complainant / respondent with interest @ 9% per annum from the date of complaint to the date of payment of the aforesaid amount of money in addition to litigation expenses of Rs. 3,000/-, awarded by the learned District Forum.
2. The brief facts of the case are that the complainant M/s. Ruchira Papers Ltd., Kala Amb, District Sirmour, Himachal Pradesh is a limited company and carries its business of manufacturing of kraft paper in their factory. The complainant got insured the building of factory, plant and machinery and other fittings through three cover notes No. 20973, 22463, 22162 for a period of one year.
It has been stated that on the night of 27th / 28th November, 2004, at about 3.00 A.M., an explosion took place in the rag digester working in the factory for manufacturing of kraft paper, which caused extensive damage to the building and injuries to the workers resulting in the death of two workers.
The matter was reported to the police and an FIR was also registered. The claim was also lodged with the petitioner insurance company. The surveyor deputed by the petitioner assessed the damage to the digester at Rs. 2.5 lacs after taking into account the depreciation and excluding the value of salvage. The surveyor also assessed the loss to the building at Rs. 1,45,878/-.
However, the claim was repudiated by the petitioner on the ground that this was not a case of explosion and hence the risk was not covered under the relevant policy.
3. It has been stated in the complaint that the process involves cutting the old gunny bags and feeding them into the rag digester and chemicals like soda ash / caustic soda are added along with fresh water.
The same is cooked after closing the digester lid tightly with steam pressure for about three hours. After three hours of cooking, the pressure is released by opening the vent line after stopping the digester. The digester lid is then opened and cooked pulp is dumped on the floor by rotating the digester. It has been stated that on the night of 27th / 28th November, 2004, the digester exploded as a result of which the complete system of rag digester including its building drive unit and roof good badly damaged. The cooked hot rags pulp along with steam violently splashed out, causing injury to the labourers and resulting into the death of two of them. The complainant stated that the loss of digester amounted to Rs. 6,50,000/- and building damage was to the extent of Rs. 5,05,452/- and hence the total loss was Rs. 11,55,452/-. The complainant demanded a sum of Rs. 11,55,452/- along with compensation of Rs. 1,00,000/- and interest of 18% per annum.
However, it was maintained by the petitioner insurance company that the Executive Director of the complainant Shri J.N. Singh had given in writing that the accident occurred due to mechanical failure of lid lock of the Digester; it was not the case of explosion and hence it was not covered under the terms and conditions of the policy.
The petitioner also obtained report from M/s. Z.V. Islam & Associates, which stated that there was no explosion.
4. The complainant then filed the consumer complaint No. 21/05 on 18.03.2005, which was decided on 14.05.2009 by the District Forum and the said Forum allowed the complaint and directed the petitioner to pay Rs.
10,61,210/- along with interest @ 9% per annum from the date of filing of the complaint and also Rs. 3,000/- as litigation expenses. The State Commission, in appeal, modified the said order and reduced the compensation to Rs. 5,71,172/- along with interest @ 9% per annum and Rs. 3,000/- litigation expenses. The State Commission allowed the claim for damage to the building to the extent of Rs. 1,45,878/- as stated by the surveyor. They also allowed a sum of Rs. 1,75,294/- for some other items involving dismantling etc., which were not recommended to be allowed by the surveyor and estimated the total money payable for damage to the building as Rs. 3,21,172/-. They also stated that the cost of the Digester was Rs. 8,00,000/- and after accounting for 50% of the value as depreciation and salvage value of Rs. 1,50,000/-, the balance Rs. 2,50,000/- was required to be paid and in this way, a total sum of Rs. 5,71,172/- (3,21,172/- + 2,50,000/-) was payable to the complainant. It is against this order that the present petition has been made by the insurance company.
5. At the time of hearing before me, the learned counsel for the petitioner Shri Kishore Rawat invited my attention to a copy of the Standard File and Special Fire Policy (Material Damage) as issued by the petitioner company in the case. He stated that the description of the perils was given in the said policy and the mechanical failure was not covered under the definition of perils. The learned counsel invited my attention to the claim form dated 11.01.2005, initially submitted by the complainant, in which the cause of accident has been mentioned as due to failure of safety lid lock of Digester. Later on, the company submitted another claim form in which the cause of fire/accident has been stated to be due to explosion. The learned counsel stated that if the damage was due to explosion, the compensation could be awarded, but in that case also, damage done to the Boiler was to be excluded from compensation. The learned counsel argued at length that it was the own admission of the complainant including their own Executive Director, by which it was stated that the incident occurred due to failure of the safety lid lock of Digester.
The report submitted by M/s. Z.V. Islam & Associations, who are Risk Management Insurance & Fire Protection Consultants states that no fire/smoke was reported or seen before or after the accident and no fire fighting was requisitioned at any stage; no sound leading to explosion was heard or reported and hence it was not a case of explosion. The report given by the surveyor also stated that the damage occurred due to mechanical failure of lid lock of the Digester and the possibility of loss due to explosion was totally ruled out. The surveyor stated that the loss did not fall under the terms and conditions of the policy. The learned counsel further argued that even if it is stated that explosion had taken place, the loss for the boiler/digester could not be paid as per the terms and conditions of the policy. The learned counsel pointed out my attention to the finding of the State Commission where they have stated that the surveyor had not given any reason for excluding certain items involving damage to the building. He stated that the surveyor had given detailed reasons for excluding such items in his report. The claim should be restricted to be paid as per the report of the surveyor.
6. On the other hand, the learned counsel for the respondent/complainant stated that after the incident, the surveyor was appointed by the petitioner on 01.12.2004 and he visited the same day, but he had given his report after a long time in July, 2005. However, the report of the consultant M/s. Z.V. Islam & Associates was submitted before the surveyors report on 23.04.2005. Pointing out my attention to the contents of this report, the learned counsel stated that this report was based on presumptions only and they never visited the site of the accident. They had also stated that this was not their final interpretation / view and for further query, their Head Office at Bombay should be contacted.
The learned counsel expressed the opinion that this report was not a reliable document and hence should not be dependent upon. He further stated that both State Commission and the District Forum had given concurrent findings regarding the incident and the same should be sustained. From a legal point of view also, while deciding the revision petitions, this Court should interfere only, if any substantial question of law was involved. In the present case, no such question of law had been raised by the petitioner. He stated that the learned State Commission had clearly brought out that the petitioner could not take the plea of Exclusion Clause regarding damage to the Boiler. The learned counsel stated that the order passed by the District Forum, should be restored and compensation should be given as awarded by the District Forum although the complainant/respondent had not filed any petition against the order passed by the State Commission, by which the quantum of compensation was reduced from Rs. 10,61,210/- to Rs. 5,71,172/-.
7. In reply, the learned counsel for the petitioner stated that the order passed by the lower Court was perverse in the eyes of law and hence the same could be challenged by way of revision petition.
In the wake of own admission by the complainant, the District Forum or the State Commission should not have come to the conclusion that explosion had taken place.
8. I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me. From the factual matrix of the case, it is very clear that there was an accident in the factory on night intervening 27/28.11.2004, which resulted in extensive damage to the building of the factory and the Digester and also several workers sustained serious burn injuries, resulting in the death of two of them. I agree with the observations made by the learned State Commission that it was a case of bursting. The bursting could be due to mechanical failure of the lock of the lid or due to any other reason, but the fact is clear that cooked and hot material from the Digester had fallen on the workers in the vicinity of the machinery. In this way, there seems to be a very thin line dividing the factum of explosion or non-explosion. It is true that the complainant themselves mentioned in the beginning about the failure of the safety lid lock of the Digester and later on, termed it as explosion, but the quantum of damage caused, appears to be the same as would have accrued due to explosion. I therefore, tend to agree with the finding of the District Forum and State Commission that the complainant need to be compensated under the terms and conditions of the Standard Fire and Special Perils Policy issued by the petitioner in his favour. In so far as the quantum of compensation is concerned, the learned State Commission have based their findings regarding loss to the building on the report of the surveyor, which stated that the loss to the building was Rs.
1,45,878/-. The learned State Commission also allowed compensation for items involved in dismantling and masonry in walls and cement, plaster etc., for which they allowed a further sum of Rs. 1,75,294/-, making it a total of Rs. 3,21,172/-. The cost of Digester was also added after taking into account 50% depreciation and deducting the salvage value. I do feel that the order passed by the learned State Commission is based on a sound reasoning and correct appreciation of the facts and circumstances on record. There is no reason to award the compensation as given by the District Forum because the respondent/petitioner have not challenged the findings of the State Commission.
9. In view of this discussion, the present petition is ordered to be dismissed and the order passed by the State Commission upheld with no order as to costs.
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(DR. B.C. GUPTA) PRESIDING MEMBER SB/4